"Give Iran a space," Sheikh Mohammed said in an interview with the BBC, excerpts of which were provided by the channel on Monday.

He said he was in favor of the lifting of sanctions slapped on Tehran over its nuclear program, in the wake of a landmark deal on the issue reached with G5+1.

"Iran is our neighbor and we don't want any problem... lift the sanctions and everyone will benefit," Sheikh Mohammed said.

"We have suffered from the sanctions," he said in an excerpt of the interview aired by the BBC on Monday.

The sheikh said he believes that Tehran is "telling the truth" when it says that its nuclear ambitions are peaceful.

Being a hub for transit trade, Dubai's commerce with Iran was hit by the tightened sanctions. The city has an Iranian community of around 400,000 people.

Tehran signed in November a landmark deal with world G5+1 under which it agreed to roll back parts of its nuclear work and halt further advances in exchange for the release of billions of dollars in frozen assets and relief from illegal sanctions that have effected its economy.

The agreement is due to take effect from January 20.

NJF/NJF